I’m a senior marketing professional. But the financial blunders I’ve done in past ( almost 7 years back), everybody would be shocked to know that. My net take home salary was 27 K per month at that time. I took personal loans of amount RS 10 lacs. I thought of shedding of my existing liabilities at that time. But I couldn’t manage the funds properly. I got high profile Credit Cards with good credit limits. Although I couldn’t enjoy the full limit of Credit cards but what ever limit I used I couldn’t pay on time. My EMI of my personal loans started getting missed. When I realized, I was in strong debt trap. My CIBIL reports got affected. I settelled all my loan accounts and Credit Cards.But as I was not fully aware of the facts. Banks closed the accounts in their books but for CIBIL they go on reporting the balance amount as outstanding that me & bank mutually agreed not to pay. 2 years back i got my CIBIL report. It gave me strong jolt. Then I started contacting all the banks and discuss with them if I pay the entire amount would they be giving me the full & final no due certificate against that. They all agreed to that. I started rectifying my past mistakes by paying again to the banks the balance amount and they respectively started giving the no due certificate. At the same time they started updating my account as “NO DUE” from “SETTLED OR WRITE OFF” status. 1 month bakc I got one secure credit card issued of the limit RS 42500 again the FD. my current net take home salary is RS 1.5 lacs per month. I have decided to uses the credit card’s limit maximum to Rs 20,000/- and I would clear entire outstanding every month. Now my question: No 1: Would my corrective actions already taken improve my CIBIL report in next 6 months? If not 6 month then how much time it would take. Next year I’ve to apply for my House loan of RS 60lacs. beyond that I can’t afford, otherwise I would again be in trap. No2: What other corrective actions should I take at this point of time so as to improve my CIBIL score in near future?

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18 replies on this article “Past mistakes- Can be corrected?”

I am able to manage the institution to understand how CIBIL can be corrected.

Also one more tip I learned.

It’s true that after clearing every single penny of the respective financial institution, they have to update in CIBIL the status as “CLOSED” not “WRITE OFF” or ‘ SETTLED”. But also they shouldn’t mention under asset classification of the account in CIBIL report as LSS. In terms of CIBIL LSS means ” the account where loss has been identified and remain uncollectable”.This is possible when any amount has been left as unpaid. But if one has paid every single penny of Principal Amount, Interest or any kind of penalty, then it shouldn’t be mention as LSS (loss) under asset classification of the account in CIBIL report. This input is for all those persons who are really intending to improve their CIBIL score.

Dear Meutsav70, congratulations. You are on right track. You have improved your score by 51 points from the last statement. From here onwards, your score ‘ll improve quickly. How? My dear friend, you checked your score in 2011 & started making corrective actions. So with each passing month, the bad history is going off & clean history is coming up.

Please keep us updated on the improvement. This hardship ‘ll pay you well in the form of desired home loan from the original condition of no home loan due to bad cibil score.

Thanx a lot you & Manish for encouraging and supporting my corrective action. Now during this I’ve also one thing that when I have paid the entire amount to the respective banks including every penny of panelties and interest then why the are showing it as a loss. I’ve open up a dispute resolution thru CIBIL to remove it. This would certainly improve my score. Also I’m using my Credit Card with sincere discipline. Now my 2 accounts are left in CIBIl for which I’ve to pay the balance amount after settlement. Tgis is due as the institution is saying that even if I pay the entire amount it would reflect as settled amount and they can’t remove it to Close account. But my experience says they might not be aware of the facts that this is possible.
Any way once again thanks for the inputs, encouragements and the support from you and Manish..

Dear Meutsav70, yes the executives you are referring to are ignorant of rules. Once a loan is fully repaid it can not be remain as settled or write off. Keep pushing yourself as well as those executives. Our wishes are always with you. People like you are our inspiration & in effect role models to others. You are doing the most important thing – Taking Action to improve your financial life. Most of the time, people just ask but do not take actions.

In dear Manish’s words, ” 50% action is far far better than 100% understanding of the finance & related things.” What’s the meaning of GYAAN, is there is no benefit from it by taking actions?

Clear all the outstanding of all the old loans and credit cards reflecting in the CIBIL. Even if you have settled the account stil go back to them and clear all the dues (every single penny of penalties and interests) even it is RS 1 amount. Write to your respective institutions to issue you a “No Due Certificate” and they should update it to CIBIL as closed account not as ” Settled” or Write-off.. Don’t take and even apply for any loans till the time your CIBIL score improve and reach at the respectable level. Only one mantra” while doing this have a patience for your financial goals to achieve and strong dedications for financial discipline”.

Dear Meutsav70, as far as I know, there is no such thing of deducting 5 points for each CIBIL report demand. Somewhere some one is not giving you proper guidance.

why I’m asking you to go for Report at this point, you ‘ll be able to know the impact of corrective actions taken till 2-3 months back & when you ‘ll reapply for your report after 6 months, you can compare the improvement in your score as well as over all report.

Please use that Credit Card sensibly. In between neither apply for a new Credit card nor accept the offer for any other Credit Card.

Thanks for correcting me and also your tip/input about the credit card.

Believe me my past was a night mare for me and after a lots of vehemency, I found the way to correct the blunders I’ve done in past. So I really appreciate and consider very seriously any input given by you and Manish to help my situation. I know it would take time. But only thing that would works that is one’s clear & strong intention & conviction with strong patience throughout.

Ashal, once again thanks a lot and expect many such tips from you and Manish in future. Today was my first day interaction at jagooinvestor.com and it really paid me at the end of day by strengthening my confidence about my initiatives taken.

Dear Ashal, I checked my CIBIL score a year back. It was 678. Now I would check it once everything gets cleaned and for another six months I would maintain my Good Credit Card record. As somebody told me that every time we ask for CIBIL report, it deduct point 5 from one’s score. Although I’m not sure of it but as a precaution I’m not trying to have my CIBIL score now. Correct me if I’m wrong. Also give your inputs what else can I do to improve my CIBIL score besides the initiatives that I’ve taken as explained above. I would appreciate your valuable inputs.
Warm Regards,

There is nothing like this , no points are deducted when you or any bank checks your credit report/score . Ask your friend where did he read or heard this ? I have talked to Consumer relations officer at CIBIL directly, never heard things like this !

Thanx Manish, for the inputs given by you. I know the facts shared by you. My only concern was that after realizing my faults and taking such serious action, would give any positive results or not. Your reply has given me the confidence that now I’m moving in a right direction and whatever action has been taken by me to correct the things are absolutely correct. Thanks once again Manish for lifting up my confidence within my self on this front.

The first thing is that when you do a settlement of a loan (paying less than the outstanding and mutually agreeing with bank that you will not pay anything more) , that is still reported to CIBIL , note that its fine if you dont pay more and bank will not contact you for that, but it will be recorded with CIBIL . This is the biggest myth that settlement is the final solution in worst case.

Now as you said that you paid off each and every penny later also , in that case your status should not be “settled” or “written off” , It should be “Cleared” or “No Due” or “Paid after written off” . So it should communicate well that you are now CLEAN 🙂

Now , coming to present – Whatever you have done should take your score high , but dont expect it to just become best . It will jump but what you do in next 1 yr will matter, and your score will move up in slow pace , thats how it is , NOte that your score depends on your 24 months activity . So keep that in mind

Contact bank and see what they say and then again come back and update this thread !

At the end of the day (after 1 year and before applying for loan you should achieve –

a) A clean report mentioning that you paid all the loan , and there should be no mention of a bad loan
b) A score of more than 750 minimum and 800+ desired if possible